With the Tsunami destruction in Sri Lanka in 2004, coastal communities became vulnerable to numerous environmental and socio-economic consequences. Besides, people tend to be more focused on the socio-economic impacts, as they suffer severely from that natural disaster. Consequently, this chapter comprehensively analyzes the socio-economic vulnerabilities caused by the Tsunami, focusing on the 2004 Tsunami incident in Sri Lanka, which created a disastrous situation among coastal communities. Moreover, it critically explains the integration between socio-economic aspects and the vulnerability of coastal communities during Tsunami events. With the devastation during the first event recorded in recent Sri Lankan history, Galle City was highlighted due to its extensive damage under different circumstances. Accordingly, the chapter evaluates the pre- and post-socio-economic conditions dominant in Galle City with the disaster recovery exertions. Further, different socio-economic perspectives on Tsunami vulnerabilities, including social cohesion, livelihoods, housing, and resource accessibility experienced by various community segments in the coastal areas of Galle City, are expansively defined with insights from urban planning, economy, sociology, and Tsunami-related reviews. Consequently, it provides potential improvements and novel pathways for future research focusing on resilience and sustainability in Sri Lankan coastal communities and beyond.